NetApp, Inc.

Good day and welcome to the NetApp first quarter of fiscal year 2027 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star 1 again. Please note, this event is being recorded. I would now like to turn the conference over to Kris Newton, Vice President, Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our Q1 FY27 earnings call. With me today are CEO George Kurian and CFO Wissam Jabre. This call is being webcast live and will be available for replay on our website at NetApp.com. Thank you so much for joining us today. and other growth initiatives and strategies. These statements are subject to various risks and uncertainties which may cause our actual results to differ materially. For more information, please refer to the documents we file from time to time with the SEC and on our website, including our most recent Form 10-K and Form 10-Q. We disclaim any obligation to update our forward-looking statements and projections. During the call, all financial measures presented will be non-GAAP unless otherwise indicated. Reconciliations of GAAP to non-GAAP measures are available on our website. I'll now turn the call over to George.

Thanks, Kris. Good afternoon, everyone. Thank you for joining us today. We delivered a stellar start to the year, exceeding our Q1 guidance on every metric and delivering a record-setting first quarter. Revenue increased 30% year-over-year to $2.03 billion. Our disciplined approach converted robust top-line growth into significant profitability, even in a challenging component cost environment, with gross profit growing 29% to a record $1.43 billion. Operating margin reaching 31.9% and EPS up 66% from Q1 a year ago. Adjusting for the additional week in Q1, our performance still stands as one of the best in the company's history. This quarter's achievements reflect more than just strong execution. They underscore NetApp's growing leadership in a rapidly evolving environment. Our broad-based success spanned industries and geographies with multi-year agreements, expansion into new workloads, and deeper customer engagement. All strong leading indicators of durable growth. While we're seeing some accelerated purchase decisions and pricing benefits, we are also seeing a clear structural improvement in the underlying demand environment, all of which contributed to Q1 strong results and are fueling our momentum. This exceptional quarter is both a testament to our execution and a clear signal of the expanding opportunities ahead. Given our strong start and the success we're seeing across our business, we are materially raising our outlook for the year. AI is no longer a future aspiration. It's a business imperative. As organizations move to operationalize AI, the challenge is not just compute but data readiness. NetApp is a key partner for companies making the shift. Eliminating complexity and accelerating time to value at scale. The NetApp platform enables customers to make all data AI ready in place, providing unified storage, robust security, and a single control plane across hybrid multi-cloud environments, delivering capabilities that redefine expectations in the industry. By removing the need for data movement, we empower enterprises to accelerate AI and analytics while maintaining governance and control, enabling them to transition from AI experimentation to production with confidence. The strength of our platform is fueling both deeper relationships with existing customers and new customer acquisition. A recent win highlights this momentum. In a highly competitive evaluation, a major U.S. utility chose NetApp over both legacy and flash-only competitors, displacing the incumbent and standardizing on our unified AI-ready data infrastructure. Wins like this, where a customer entrusts their most demanding workloads to NetApp, are leading indicators of our expanding role in the market and set the stage for long-term growth. Our record Q1 was fueled by robust growth in public cloud, All Flash, and Keystone revenues, reflecting the momentum in our business and validating our strategy as we deliver meaningful results for customers. Driven by strong adoption of our first-party and marketplace storage services, Q1 public cloud revenue grew to $206 million, up 28% year over year, and up 19% adjusting for the extra week. Customers choose NetApp for our secure, scalable cloud-native storage services as they migrate workloads to the cloud. VMware workloads in particular are among those increasingly being moved to the cloud, opening significant opportunities for NetApp. In Q1, a U.S. hospitality company adopted NetApp technology for the first time through Amazon FSX for NetApp OnTap, supporting its large-scale VMware migration to AWS. FSXN delivered superior performance, lower costs, and versatile workload support. Similarly, a US public sector organization selected Azure NetApp Files as a part of its data modernization efforts. ANF overcame technical barriers found in other cloud services and enabled substantial cost savings. These wins highlight how NetApp's differentiated cloud storage solutions facilitate seamless, efficient VMware migrations, reinforcing our ability to drive sustained growth as organizations accelerate their cloud adoption. All FlashArray revenue reached $1.31 billion in Q1, up 47% year over year. Customers are standardizing on NetApp for their most mission-critical workloads, including GPU-intensive AI pipelines that demand high performance, low latency, and built-in cyber resilience. Our innovation and go-to-market execution continue to drive share gains in this part of the market. In today's challenging cost environment, the breadth and flexibility of the NetApp platform stand as strategic advantages. We empower customers to optimize performance, capacity, and budget requirements without compromising cyber resilience or operational simplicity. This value proposition is driving strong customer demand across our portfolio and notably we are seeing accelerating interest in our hybrid flash solutions. Let me share recent examples of how the breadth of our portfolio has enabled us to displace competitors and win new customers. In its first engagement with NetApp, a European IT service provider for pension insurance selected our unified storage to meet stringent security and resilience requirements for critical infrastructure. Our flexible architecture not only supports the availability and integrity of highly sensitive data today, but also provides a secure, efficient and sustainable foundation for future AI workloads. NetApp recently displaced a competitor at a leading transportation agency. Our solution combined all flash arrays for high-performance processing of massive video files with hybrid flash arrays for reliable, cost-effective, long-term retention. Our ability to deliver the scalability, reliability, and performance required for advanced analytics and ongoing infrastructure maintenance was key to the win. AI is powering a new wave of growth for NetApp, momentum that has been building and continues to accelerate. In Q1, we won approximately 350 AI and data lake modernization deals, up significantly from a year ago. Importantly, deal sizes are increasing as customers move from proof of concept to production. Initial wins in prior years are expanding into production-level workloads, reflecting confidence in NetApp's ability to support large-scale AI environments. Our solutions are enabling customers to activate data in place for AI, accelerate time to insight, and achieve real business outcomes, putting NetApp at the center of their AI journeys. Here are a few examples from Q1. We signed a significant agreement with Samsung Electronics to support its EDA environment and AI center of excellence. A public sector organization awarded NetApp a strategic deal to modernize and expand its intelligence capabilities and deliver real-time analytics, leveraging NetApp AFX integrated with NVIDIA SuperPOD. AFX's disaggregated architecture provides the flexibility and performance required for advanced AI workloads and provides a future-ready foundation delivering the power and scalability needed to meet evolving requirements as data demands grow. NetApp secured a significant win with an Asian neocloud provider, supplying high availability, secure and scalable storage for new customer-facing AI services. Our robust multi-tenancy and deep expertise in large-scale Kubernetes and OpenStack environments set us apart, helping the provider to modernize its infrastructure and support demanding AI inference workloads. This win displaced existing vendors and established a strong foundation for NetApp in one of the provider's most strategic AI initiatives. We are strengthening our leadership through strategic acquisitions that expand the capabilities of the NetApp platform and broaden our addressable market. These investments position us to stay ahead as customer needs evolve, deepening our differentiation in cloud and AI. We acquired Datapilago, a recognized innovator in AI data infrastructure. Their nuclear software engine enables high-performance, in-place data processing, eliminating costly data movement and streamlining AI readiness. With this technology, We believe we can unlock additional value from the vast unstructured data already managed on our platform, giving customers fresh opportunities to accelerate their AI initiatives and maximize the potential of their existing data assets. This positions NetApp as the company that makes zero copy activation of enterprise data for AI real. helping customers drive AI initiatives, improve efficiency, and unlock more value from their data. At the start of Q2, we acquired Jetstream, a leader in cloud-native disaster recovery for VMware environments. Jetstream enables continuous protection and recovery of VMware workloads across diverse storage environments with seamless replication to NetApp cloud offerings like Azure NetApp Files. This acquisition will allow us to offer a simpler, more flexible path to cloud modernization and positions NetApp as the recovery destination of choice for VMware deployments even when production data originates from competitors' infrastructure. NetApp's strong Q1 results underscore our leadership in a transformative era shaped by accelerating AI and cloud adoption. The strength and flexibility of the NetApp platform allow us to support a diverse and growing customer base by winning new business, Deepening partnerships and investing in innovation, we are building a durable foundation for continued leadership and long-term growth. We are executing with discipline and vision and building on our leadership to deliver sustained value for our customers and shareholders. We are excited to host our annual customer conference, NetApp Insight, in September. We will showcase substantial innovation throughout the NetApp platform, delivering new value for AI and addressing the unique needs of high-growth markets like Neo and Sovereign Clouds. We also will host an investor session to provide more detail on our strategy and solutions, and we hope you will join us. In closing, I want to thank our employees for their dedication and focus. Our record start to the year is a testament to our team's commitment to our customers and to driving NetApp's continued success. I'll now turn it over to Wissam.